President Joe Biden to Pardon Student Loans Up to $20,000

United States President Joe Biden made an important announcement on Wednesday in which he unveiled plans to pardon student loans for tens of millions of Americans. Polarizing as the subject is even amongst Democratic party faithful, the move from the President stems from months of deliberations in the White House, and eventually, the targeted relief is now being felt across the board.

According to the details of the pardon, loans up to $10,000 will be pardoned for students who earn less than $125,000 or households with less than $250,000 in cumulative earnings. The proposed loan cancelation will see those who were given Federal Pell Grants and earns less than $125,000 per annum.

“All of this means people can start finally to climb out from under that mountain of debt,” President Biden said in remarks from the White House. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”

While the motive behind the new policy is noble, critics believe a legal redress may be sought, but without a defined plaintiff in view. The student loan forgiveness came as a result of an Executive action in what is considered a legislative affair. While this may be a minor concern, there are claims that the loan pardon is unjust as it is unfair to those who have worked hard to offset their own loans. The Democrats supporting the President posited that the loan cancelation is necessary to address racial disparities in the economy.

According to projections, the total amount of pardon is estimated to be worth about $300 billion. This figure is, however, dependent on the number of people who eventually apply for the loan.

Backlash on the Student Loan Pardon

As mentioned earlier, the announcement of the student loan pardon did not sit with a lot of people including Jason Furman, a Harvard economist and former top economist for President Barack Obama. Furman believes this pardon will leave people with so much money and further stir up the inflationary pressures that the economy is currently witnessing.

Senator Ben Sasse, Republican of Nebraska, said the plan “forces blue-collar workers to subsidize white-collar graduate students”. Instead of demanding accountability from an underperforming higher-education sector that pushes so many young Americans into massive debt, the administration’s unilateral plan baptizes a broken system.”

Let’s be clear: President Biden did not cancel student debt — he transferred it on to the backs of millions of hardworking Americans who chose not to go to college for expensive degrees. (1/2)

— Chris Sununu (@GovChrisSununu) August 24, 2022

While the focus, for now, is on the canceled loans, President Joe Biden is even pushing for more proactive measures to let debtors have their bills subsidized. Amongst the supporters of the initiative is Senator Elizabeth Warren (D-Mass) who said no President has touched the lives of so many Americans directly as President Biden has done.

“Targeting twice as much relief to Pell recipients helps close the racial wealth gap,” she said.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.